Thought Leadership

The next-gen chief diversity officer. An evolving profile of high- impact D&I executives.

Disruption is upending every sector in every industry. In the wake of tumultuous change almost everything transforms, including what is needed and expected The business case. from leaders. New skills and mindsets are required from today’s CEOs and other C-suite and functional In Europe and the United leaders, and the same is true for the chief diversity States, companies with higher officer (CDO). levels of diversity among their These changing expectations of the CDO dovetail executive board members had into another trend: the recognition (finally) of proof better ROE (return on equity) that greater diversity and inclusion (D&I) fosters corporate success. D&I enhances innovation, boosts and EBITs (earnings before productivity, helps captures new markets, and serves interest and taxes) than as a powerful magnet to attract and retain the best companies with little executive talent. board diversity. The same This would seem to bode well for CDOs who have study found that companies their hands on the diversity levers and are positioned with gender and/or culturally to help their organizations successfully meet the diverse executive teams were challenges of change—not just for the sake of 21% to 35% more likely to protecting those who have been most marginalized but also for the sake of their companies that need outperform the competition the richness of the diversity to win in a world replete (McKinsey, 2018). Yet another with unprecedented peril as well as opportunity. study showed that diverse Data shows, however, that D&I progress has largely teams made superior decisions stalled. Consider the Korn Ferry Market Cap 100, up to 87% of the time, twice as which tracks extensive demographic and professional fast, and with half the data on the boards of directors of the largest meetings (Cloverpop, 2017). companies in the US. Boards remain predominantly white (Korn Ferry, 2017). White males comprise 72% of corporate executives at 16 of the Fortune 500 companies (Fortune, 2017).

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Women make up 45% the S&P 500 workforce, but Looking back at the past. only 5.2% of the S&P 500 CEO positions (Catalyst, 2018). Blacks and Latinos barely show up in 3% to 4% of executive positions (Hispanic Association on To appreciate the need for CDO leadership to Corporate Responsibility, 2016). evolve in new ways to meet next-generation challenges, it’s worthwhile to look back first. After With figures like these, how can organizations all, companies have been investing in approaches hope to master change? to D&I for decades. They began with foundational practices; for Elizabeth Nieto, global chief diversity The urgency, then, for D&I leaders to have an and inclusion officer of MetLife, when she first impact has become even more compelling. As started in the field, the compliance piece of Gwen Houston, former CDO with Microsoft, diversity work was the emphasis, focusing on acknowledged, “We’re in a dynamic time, and this areas such as sexual harassment and employment work needs to be taken to a new level. How relations. diversity leaders show up as leaders of people is so important.” But a lot has happened since then. Social movements. Globalization. An economic crisis. Yet, something is clearly holding our D&I leaders back. Is it that our times are too volatile and David Porter, former executive director of the disruptive and require fresh and inventive ideas Walter Kaitz Foundation, which is focused on from our diversity leaders? And if so, how can they increasing diversity in the cable industry, best address the new phenomenon of political recognizes that much has changed. “I have seen diversity? Are they prepared to respond to societal this work evolve. When I started, most companies shifts? Can they engage and facilitate courageous didn’t have CDOs. Today it’s a best practice.” yet constructive conversations across the divides? Have they the ability to take a stance when certain But has the nature of the role of the diversity events happen in the political and social worlds? executive changed, too? Our research shows some D&I leaders have risen Deb Dagit, president of Deb Dagit Diversity and above the challenge and are making a former chief diversity officer of Merck, reflected on transformative impact. What sets them apart? It’s earlier years, when “the people who took on a critical question, because the answer has leadership roles tended to come out of race important implications for what should be relations, EEO, and affirmative action.” It was expected of today’s CDO. natural, therefore, for many diversity leaders to be characterized by a passion to advocate, right Understanding the next generation of CDO wrongs, and fight injustice. And while Houston leadership that is required to drive success is the recognized that “we started out as activists,” she subject of this paper. To explore it, we leverage affirmed that other leadership attributes are more world-class Korn Ferry data, combined with a important today. rigorous talent assessment of more than 60 D&I leaders, and qualitative insights captured through What are these other attributes that are enabling in-depth interviews with four identified “best-in- some CDOs to gain the confidence of their class” CDOs. This work will help individuals and organizations now, and will equip the next organizations see how CDO requirements have generation of CDOs to successfully navigate the changed, and enable them to evolve the role from future? a diversity champion to a truly capable and influential organizational leader.

“We’re in a dynamic time, and this work needs to be taken to a new level.” Gwen Houston, Former Chief Diversity & Inclusion Officer, Microsoft

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Understanding our research.

Korn Ferry studies have shown that leadership qualities have a bigger impact on business growth than market forces. We believe this would be true as well for diversity leaders: an organization’s ability to achieve breakthroughs in D&I that yield business results rely less on external forces and internal resistances than on the effectiveness and influence of the D&I leaders. Our priority, then, was to identify a best-in-class profile for CDOs that would bring these capabilities to light. We leveraged our Korn Ferry Four Dimensions of Leadership model, which focuses on four talent dimensions: Competencies, Experiences, Traits, and Drivers. The qualities within each of these quadrants can be taken together to paint a complete picture or examined individually to focus on specific aspects of a person or an organization to determine what differentiates the transformative diversity leader from those who are treading water.

Korn Ferry Four Dimensions of Leadership and Talent

Korn Ferry's Four Dimensions (KF4D) of Leadership & Talent is the talent intelligence engine that powers all our solutions and products. Based on millions of candidate profiles and leadership assessments in our database, it is our most credible tool yet for evaluating leadership talent.

Competencies Experiences

Skills and behaviors required for Assignments or roles that prepare a success that can be observed. person for future opportunities.

FOR EXAMPLE: FOR EXAMPLE: Decision quality, strategic Functional experiences, mindset, global perspective, international assignments, and business insight. turnarounds, and fix-its. WHAT YOU DO WHO YOU ARE Traits Drivers Inclinations, aptitude and natural Values and interests that influence a tendencies a person leans toward, person’s career path, motivation, including personality traits and and engagement. intellectual capacity.

FOR EXAMPLE: FOR EXAMPLE: Assertiveness, risk taking, Power, status, autonomy, confidence and aptitude for logic and challenge. and reasoning.

The four talent dimensions are highly predictive of performance differences and can be correlated with key talent variables. As such, the talent dimensions reveal links between leadership performance and organizational outcomes. In the category of D&I, our research yielded rich insights into the role of the CDO and informed a new benchmark for diversity leaders that forward-looking companies can study and apply. Companies will benefit by understanding how its current diversity leaders stack up against this new benchmark. In addition, companies will gain insight into how to prepare for a smooth transition to the next generation to avoid losing hard-won ground.

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Best-in-class is based in research and data. With the Korn Ferry Institute, we evaluated successful 21st century leaders viewed through the KF4D model. This model reflects decades of research and is based on the world’s richest data set with more than 7 million executive and professional candidate profiles and 2.5 million assessments. Our data spans every industry, job function, and leadership level from individual contributors to CEOs. We conducted rigorous assessments of more than 60 D&I leaders, including 53 D&I executives and 14 individuals who we identified as best-in-class D&I executives. Our research concentrated on Competencies, Drivers, and Traits, which are the focus of this paper, since Experiences were not uniform and did not yield a consistent differentiator among the D&I leaders. To understand how we pinpointed the 14 best-in-class D&I executives, we initially identified 11 outstanding D&I leaders, based on deep D&I expertise in our Executive Search and D&I Advisory Services consultancies. These 11 leaders had strong reputations and measurable proven performance. An analysis of the assessment data of these individuals validated their best-in-class status as they clustered around certain key attributes, proving that these leaders stood apart from the rest, and we labeled them “best-in- class D&I executives.” Using this data and with additive insights from four of the best-in-class D&I executives, we developed a best-in-class profile for CDOs as a benchmark. We then went back into the results of the group of 53, which we labeled “other D&I executives,” and identified three individuals who matched the best-in-class D&I executive profile and moved them into the best-in-class cohort (for a total of 14). While we are deeply familiar with a great many players in the field, the profile served as a tool that helped us discover best-in-class performers who had been outside our purview.

Identifying the requirements for a new generation of D&I executives.

Looking at key elements of data, we derived strong and valid predictors of successful D&I leadership based on areas of Traits, Drivers, and Competencies. TRAITS Personality traits are the natural inclinations or preferences that influence behavior. In general, best-in-class D&I executives are achievement oriented—that is, go-getters who are comfortable presuming authority and readily take the initiative to drive the agenda. At the same time, the best-in-class D&I executives do so in an interpersonally sensitive, tactful manner. They are likely to be sociable, approachable, and empathetic team players who enjoy influencing and motivating people by using a combination of social skills, logic, and data; when faced with disappointment or frustration, they remain tenacious in working toward long-range goals and maintain self-possession while under stress. It is no surprise, then, that they can doggedly work to establish relationships with people who are skeptical of, disinvested in, or even opposed to issues of diversity and inclusion. Another aspect of traits is a focus on cerebral capabilities as observed through problem solving. As problem solvers, best-in-class D&I executives are flexible and intuitive, enjoy complexity, and seek a deep understanding of issues and their nuances. Houston affirms the importance of the problem-solving trait through her emphasis on analytics as a key skill. “When we think about CDO skills for the future, we cannot deny the importance of data analysis. We collect a lot of data, but volume is not as important as understanding what the data is telling us. We have to be good at this.” At the same time, best-in-class D&I executives have a high tolerance for ambiguity such that they comfortably make decisions and forge ahead despite vague, incomplete, or even contradictory information. In other words, these are confident change agents who can “figure out what to do even when they don’t know what to do.”

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“A best-in-class CDO has to have courage and high organizational savvy. You’re exposed to different people, different levels and different cultural backgrounds in an organization. It is, therefore, very important to be able to understand the different nuances if you want to have real impact.” Elizabeth Nieto, Global Chief Diversity & Inclusion Officer, MetLife

Figure 1 Comparing traits: Best-in-class D&I executives and other D&I executives.

Super factors key: Figure 1 compares the traits of best-in-class D&I executives (gray) with other D&I executives (blue). The Super Factors triangles provide a high-level overview of how these groups differ. The primary difference lies in Social Leadership, with those traits being more pronounced for the best-in-class group. The circumplex graph on the right provides personality profile details regarding the specific components of each Super Factor: Social Leadership, Energy, and Agility.

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Personality profile key. Agility Social leadership AD: Adaptability. Comfort with unanticipated changes of direction or approach. EM: Empathy. Being attuned to others’ feelings, motivations, and concerns. CU: Curiosity. The extent to which a person is likely to tackle problems in a novel way, see CP: Composure. The ability to stay calm and patterns in complex information, and pursue poised in stressful, difficult, or ambiguous deep understanding. situations. FO: Focus. Preference for organization, IN: Influence. The ability to motivate and procedure, and exactitude. persuade others. TA: Tolerance of Ambiguity. Comfort with SS: Situational Self-Awareness. The ability to uncertain, vague, or contradictory information stay attuned to one’s own experiences, that prevents a clear understanding or direction. motivations, and reactions in the present moment. RI: Risk-Taking. A willingness to take a stand or take chances based on limited information. SO: Sociability. The natural inclination to engage with and interact with others. AF: Affiliation. A preference for aligning with a Energy larger team or organization toward a common goal. AS: Assertiveness. The degree to which people enjoy taking charge and directing others. PE: Persistence. A tendency toward passionate and steadfast pursuit of long-term goals, in spite of obstacles, discouragement, or distraction. “One day, [my CEO] talked NA: Need for Achievement. A tendency to work to me about Black Lives intensely to achieve and exceed difficult Matter and asked if he standards. should make a donation. I appreciated his question, For example, top-performing CDOs know how best to respond to an instance of retail racism that but I thought he had becomes national news, how to turn a CEO’s missed the point and gave specific question into a teachable moment, and what action to pursue when a playbook hasn’t yet him two books (on race and been invented. What does this look like? For social justice) to read instance, following a highly visible racial incident, when the CEO asks, “Where should we make a instead. He read them, and donation?” to show the company’s diversity then assigned them to his commitment, top-performing D&I leaders wouldn't answer by simply naming a deserving nonprofit. leadership team. What’s Instead, he or she would guide the CEO and the more, he raised the leadership team to expand their thinking about race and the hidden role of bias in the company’s question: How can we use operations and policies, and thereby facilitate our technology to rectify fundamental organizational changes. this social issue? That was a big shift.” Gwen Houston, former Chief Diversity & Inclusion Officer, Microsoft

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DRIVERS While personality traits tend to emphasize social influence, drivers reflect a person’s motivation and engagement. In the cases of the best-in-class D&I “A CDO needs to partner executives, they were largely motivated by with others first. The CDO opportunities for collaboration. needs to make This means they enjoy group decision-making and building consensus. They value interdependence connections with and seek to be in a role that requires them to pay attention to team morale, and to encourage and countries and local support the efforts of others. experts.” At the same time, best-in-class D&I executives are Deb Dagit, President fiercely independent self-starters who approach Deb Dagit Diversity their work with an entrepreneurial mindset. In other words, they are independent thinkers who want the freedom to blaze new paths but do so in a “behind the scenes” manner that emphasizes engaging with and empowering others.

Figure 2 Comparing drivers: Best-in-class D&I executives and other D&I executives.

While the other D&I executives were also quite careers. While this may feel for many of them as independent and entrepreneurial, they were the the way toward greater impact, it was not. As the least motivated by collaboration. Said another way, best-in-class D&I executives demonstrated, the key they were most motivated by opportunities for to influence was about enabling others through prestige, status, and visibility within the collaboration. organization. They sought to expand their scope of responsibility and advance their individual

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COMPETENCIES Our research indicated that traits and drivers alone do not ensure diversity leader success. Competencies, those observable skills and behaviors that an individual will need to succeed in his or her position, are also critical. Put simply, competencies indicate what an individual can do.

Figure 3 Comparing competencies: Best-in-class D&I executives and other D&I executives.

The best-in-class D&I executives had particularly strong relationship management and thought competencies, evidenced through managing conflict, persuasion, and courage. The best-in-class group also showed themselves to be quite good at modifying their style and demeanor to suit the interpersonal situation and audience to effectively work with a diverse range of people. This means they are exceptional at building networks, connecting with people, and connecting people with each other to share information and resources to accomplish goals. These results compare to comments made by Porter, who stressed that “people who aren’t good in this role are too judgmental. Instead, you’ve got to be flexible to other people. You’re a role model and you want to show people how to be flexible to others.” The competency strengths also seem to align with the value that Dagit placed on communication and social media skills. Best-in-class D&I executives must work through others to accomplish goals, and often do so by changing minds so that priorities, policies, and procedures will be altered. They also create a climate of trust in which people are willing to experiment and innovate to achieve the organization’s objectives. The element of trust extends in multiple directions, including to the CEO. As Porter comments, “Trust happens in different ways...In whatever way it happens, it takes time and the CEO needs to feel that the CDO is truly aligned with him or her to speak on the CEO’s behalf—which is the ultimate goal.” Lastly, best-in-class D&I executives are astute talent observers who excel at developing people to meet both their career objectives and the organization’s goals.

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Regarding thought competencies, best-in-class D&I executives are strategic big-picture and holistic thinkers adept at viewing situations “A key ability for a CDO is through a global lens, anticipating and appreciating the varying needs of all parties and to influence others. And a stakeholders invested in outcomes, and cultivating best-in-class CDO builds an organizational culture that facilitates experimentation and innovation. Nieto described followership.” successful diversity leaders having “an awareness Elizabeth Nieto, Chief Diversity & to what’s happening around us. For instance, immigration is an area of tension around the world. Inclusion Officer, MetLife As I gain that knowledge I can bring it back to the organization.” This also corresponds to Houston’s observations that diversity leadership must be “cannot be afraid of the truth.” Likewise, Nieto “globally astute.” affirms that a diversity leader “has to have courage and high organizational savvy.” Dagit, who frames Other D&I executives showed many of the same courage around feedback, says: “If you see that a strengths as best-in-class D&I executives. However, person is saying one thing and doing another, you the latter group was notably better at managing have to have the courage to speak up. It makes conflict with a minimum of noise, behaving the job really tough. In fact, I always say this job courageously by stepping up to address difficult needs a hard hat and a construction vest. It’s issues and saying what needs to be said despite hazardous duty!” resistance, and delivering their message with compelling and persuasive arguments. That is, According to our research, best-in-class D&I they can build consensus even in the face of executive competencies are in relatively low difficult disagreements; they can speak truth to supply and are not easily acquired. Yet, they can power; and they can communicate in a manner be developed through a combination of that changes minds. persistence, opportunities for practice, and timely, candid feedback from mentors and colleagues. This differentiator of courage is in line with Houston’s observations that diversity leaders

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Comparing best-in-class D&I executives to best-in-class CHROs and CEOs.

Another analysis of the best-in-class data revealed compelling parallels with top-performing chief human resources officers (CHROs) and CEOs. We took our data set with millions of executive and professional candidate profiles and leadership assessments and compared our best-in-class data to CHRO and CEO profiles. With respect to top- performing CHROs and CEOs, the alignment was profound. Best-in-class D&I executives might be slightly more sociable than CEOs, and marginally more analytical and data driven than CHROs, but by and large, all three have very similar personality trait profiles.

Figure 4

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As the data shows, the three sets of leaders are much more similar than different in their competencies, as well. This is not surprising given that best-in-class D&I executives operate at the highest leadership level of an organization in influential ways. Where they do differ appears to be in competencies that best-in-class D&I executives don’t tend to use: CEOs and CHROs, both of whom have broader mandates than diversity leaders, are more skilled in managing ambiguity, making plans, and allocating resources. Best-in-class D&I executives, on the other hand, have stronger interpersonal strengths in navigating networks and managing conflicts, compared to CHROs.

Figure 5

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Today, however, the best-in-class D&I executives operate in organizational environments that "The CEO needs to feel that consider diversity and inclusion as business the CDO is truly aligned imperatives. The rapid diversification of the population, the globalization of business, the with him or her to speak on fragmentation of markets, the exponential increase the CEO’s behalf—which is in the sharing of diversity-related experiences, observations, ideas, and opinions across social the ultimate goal." media, and the shifting role of CEOs from bottom-line leaders to societal influencers have all David Porter, Former Executive contributed to the evolution of how companies Director, Walter Kaitz Foundation take into account diversity and inclusion. As a result, current best-in-class D&I executives serve less as solo activists and more as collaborative The complete picture of the change partners who work with others to evolve their organizations. next-gen CDO. Given the profound evolution of the D&I leadership role, today’s diversity leaders may find it useful to In summary, best-in-class D&I executives are reconsider what they will need to become top naturally curious and innovative leaders who performers in the coming years. One approach is demonstrate sociably engaging behaviors and to compare their own traits, competencies, and excel at building collaborative relationships, motivational drivers with those that are tactfully winning people over with compelling characteristic of best-in-class D&I executives. They arguments, fostering a culture that supports might ask themselves: Do I have the predisposition innovation and experimentation, and tolerating to shift from being an activist, striving for visibility ambiguity and change. They don’t get lost in the and who fixes problems, to a team player who weeds and possess the learning agility to make works behind-the-scenes to alter the way that decisions when faced with unfamiliar or novel business operates? Do I have the capability to problems that don’t have a clear playbook of initiate and nurture relationships, collaborate in all obvious answers. directions, and maintain my composure no matter Counterintuitively, they are much more similar to the circumstances? In fact, they may want to ask current C-suite leaders than to diversity activists whether they have the skills and inclinations to be of years ago. a C-suite-level leader. Over the past two decades, organizational sophistication regarding issues of diversity and inclusion have greatly evolved. Similarly, the nature of the CDO role has evolved. Across all those years, diversity leaders have sought to bring about positive change, but their specific goals and approaches tended to differ. Diversity leaders in the “early days” were typically activists aiming to right organizational wrongs, such as blatant discriminatory hiring and promotion practices, by instituting policies, procedures, affirmative action programs, and focusing on compliance with such changes. They also focused on prodding organizations to “celebrate diversity” through one-off diversity training programs. As a result, those diversity leaders were usually solo activists waving a flag for diversity within an organizational context of marginalization and tokenism. They were often in a role that required them to “go it alone” as they fought for respect, leadership visibility, and credibility.

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Achieving the D&I breakthrough. “I love my job because I see As numerous studies have proven, there is a connection between the diversity of our the impact we are having organizations and organizational performance in on helping our society the highly diverse, multicultural marketplace. From the diversity of our boards linking with evolve. I can help improve shareholder value, to the diversity of our my organization. I can help management yielding higher performance, to diverse teams delivering our products and services employees and their faster and better—all measures make the case. families. I can touch the “The opportunity for the CDO to be a beacon of light, especially at this time, is huge,” says Houston. communities where we do Yet, to date, the ability of organizations to become business.” significantly more diverse and inclusive have Elizabeth Nieto, Global Chief disappointed. And as we are faced with mounting Diversity & Inclusion Officer, MetLife change across governments and policies, industries and generations, and the pressure to stay ahead of demand for technology and innovation, diversity and inclusion has never been Leveraging this research can help any organization more crucial. But this will require a new cohort of identify the precise areas where strategy and leaders—the next generation—with the right Traits, diversity leadership talent are aligned—or where Drivers, and Competencies. there are opportunities to close the gaps. To set up this next generation of diversity leaders With the right diversity leadership so critical for for success requires a profile to target. Our measurable and effective change, organizations research, both quantitative and qualitative, can’t leave to chance that their CDO is up to the provides that profile of the best-in-class D&I task. The stakes, when it comes down to candidate executive, which is crucial to any company looking selection, demand greater certainty. to thrive in today’s dynamic world or any individual looking to grow and develop into a top- performing D&I leader with executive impact.

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Contributors Resources

Andrés T. Tapia “Catalyst. (2018). Women CEOs of the S&P 500. Retrieved from: http://www.catalyst.org/ Senior Client Partner, Global knowledge/women-ceos-sp-500 Diversity & Inclusion Cloverpop. (2017). Hacking diversity with inclusive decision making. Retrieved from: https:// www.cloverpop.com/hacking-diversity-with- inclusive-decision-making-white-paper Goleman, D. (2018, March 5). “Diversity + emotional intelligence = more success.” Korn Ferry Louis Montgomery Institute. Retrieved from: https:// www.kornferry.com/institute/diversity-emotional- Practice Leader , intelligence-leadership Human Resources and Diversity Officers, Hispanic Association on Corporate Responsibility. (2016). Corporate Inclusion Index. Retrieved from: Professional Search https://hacr.org/wp-content/uploads/ 2018/02/2016-HACR-CII.pdf Jones, S. (2017, June 9). “White men account for 72% of corporate leadership at 16 of the Fortune Karen H.C. Huang, 500 companies.” Fortune. Retrieved from: http:// PhD fortune.com/2017/06/09/white-men-senior- executives-fortune-500-companies-diversity-data/ Senior Manager, Search Assessment Korn Ferry. (2017). Korn Ferry Market Cap 100. Retrieved from: https://www.kornferry.com/ institute/the-korn-ferry-market-cap-100- governance-changes-at-the-top-100-us- companies-by-market-capitalization McKinsey & Co. (2018). Delivering through diversity. Retrieved from: https:// www.mckinsey.com/~/media/mckinsey/business %20functions/organization/our%20insights/ delivering%20through%20diversity/delivering- through-diversity_full-report.ashx

About Korn Ferry

Korn Ferry is a global organizational consulting firm. We help clients synchronize strategy and talent to drive superior performance. We work with organizations to design their structures, roles, and responsibilities. We help them hire the right people to bring their strategy to life. And we advise them on how to reward, develop, and motivate their people.

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